American Home granted interim OK to extend DIP loan maturity, increase availability

By Jennifer Lanning Drey

Portland, Ore., Aug. 5 - American Home Mortgage Investment Corp. obtained interim court approval of amendments to its debtor-in-possession financing that extend the DIP maturity date through Aug. 19, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

The court also granted American Home interim permission to use up to $9 million of proceeds from the sale of some non-performing loans.

As previously reported, American Home wants to extend the maturity of its DIP loan through Nov. 5; to increase the availability by $7 million; and to allow the company to keep up to $10.58 million of the proceeds from the sale of the non-performing loans for working capital and other corporate purposes.

Although the amendment actually reduces the total DIP loan commitment to $30 million from $35 million, the company said it also eliminates a $12 million reserve reduction, leaving American Home with an additional $7 million available to be borrowed.

The company will pay a $225,000 interim amendment fee.

When it request the approval, American Home said it was unable to use the loan sale proceeds to fund its operations because the DIP facility requires the company to use the proceeds to reduce the principal amount outstanding on the DIP loan.

As a result, without the amendments, the company said it may not have access to the cash needed to fund its operations and to market and liquidate its remaining assets.

The final hearing is scheduled for Aug. 18.

American Home, a Melville, N.Y.-based real estate investment trust focused on residential mortgage loans, filed for bankruptcy on Aug. 6, 2007. Its Chapter 11 case number is 07-11047.

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